05 February 2016

Obama's First Ever "Great" Month

For the first time in 95 months, the unemployment rate has dropped below 5%, which is great. In this decade, we've had a lot of misery and very, very little great.

Unemployment rates mostly bounce between 5% to 8%. About 15% of the time the economy is bad enough to drive rates above 8% and about 15% of the time the unemployment rate drops below 5%. I think that it's fair to say that above 8% the economy is miserable and below 5% it is great.

By that definition, Obama has now had 1 month of great and 42 months of miserable.

By contrast, Clinton had 44 months of great and not a single month of miserable.

And George W.? He had 32 months of great and also did not have a single month of miserable. Although the Great Recession had begun months before he left office, the unemployment rate did not go above 8% until the month after George left office, where it stayed for 42 months. Workers in the Midwest and Syrians and Iraqis didn't start streaming into unemployment offices and refugee camps until after he'd gone back to Texas.

You'd like to think that change in the unemployment rate counts for something, and apparently it does. Reagan had 27 months of miserable and no months of great, but the unemployment rate fell 2.1 percentage points from when he came into office to when he left. He finished with an approval rating over 60%. (Plus, more than any president before or sense, Reagan just looked like a made-for-TV president.)

George H. Bush had a tepid presidency that didn't include a single miserable or great month, and he finished with an approval rate over 50% in spite of presiding over a 1.9 percentage point uptick in the unemployment rate. The economy got worse during his presidency but not that much worse.

Not only did Clinton preside over 44 months of great, but the unemployment rate fell 3.1 percentage points during his time in office. Bill finished with the an approval rating of about 65%, the highest of any president in generations. Hard not to love a guy who presided over unemployment rates under 5% for nearly half his presidency. (And all the months during which unemployment dropped below 4%.)

Where does this leave Obama? It's hard to tell. Reagan had zero months of great and 27 months of miserable and is beloved by all Republicans and many Democrats and George W. had 32 months of great and no months of miserable and is hated by all Democrats and many Republicans. It's hard to tell how this will affect Obama's legacy but it does set up something that could drive the GOP crazy.

If Hillary Clinton wins the presidency, she might just come into office with the unemployment rate under 5%. In other words, when she gets into the Oval Office, the economy might already be great. If it stays there and Hillary is able to post numbers as impressive as Bill's... the Clinton legacy might be golden enough that Chelsea could win elections she doesn't even campaign for.